September 5, 2011

The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.

Why not close it down? Isn't it strange that it's on the brink — or really over the brink... in that Wile E. Coyote way...

... of collapsing entirely... and yet they still haven't eliminated Saturday delivery?

[D]ecades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees....

“The situation is dire,” said Thomas R. Carper, the Delaware Democrat who is chairman of the Senate subcommittee that oversees the postal service. “If we do nothing, if we don’t react in a smart, appropriate way, the postal service could literally close later this year. That’s not the kind of development we need to inject into a weak, uneven economic recovery.”

My preference is always: do nothing. That's the presumption you need to overcome. It's good for government and it's good for your individual life too. (For decades, my personal motto has been: Better than nothing is a high standard.)

Why not let this propped-up competitor to FedEx and UPS (and the internet) fall? There would be losers but there would also be winners.

Why are we so afraid to find out? Remember what Rahm says:

"You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before."

ADDED: My postman just delivered a 615-page catalog from Restoration Hardware. Why was that a feasible business move for Restoration Hardware? I've never mail-ordered anything from them. Why is the government subsidizing this inefficiency? If I were interested in buying something from RH, I would go to their website. Instead, I have to lug this heavy object to the garbage can/recycle bin? Think of the carbon footprint. I do! But I don't believe the government believes the climate change hype. Because they never act like they do.

IN THE COMMENTS: Paddy O said:

Ann, watch out. Don't mess with the mail. I shouldn't even be talking to you, but I'm telling you as a friend. Here's how it's going to happen: you may be walking. Maybe on a crisp, autumn day just like today. When a mail truck will slow beside you, and a door will open, and a mailman you know, maybe even trust, will offer to give you a lift. And no one will ever see you again!

166 comments:

Mentioned this to a friend of mine this morning--our business ships with USPS and I was thinking maybe we should start abandoning ship now and beating the rush, and his response was:

"I don't know. Probably wouldn't hurt to look at the options. But I don't see the USPS tanking anytime soon. They will probably start cutting costs by closing more rural PO's and stop with rural deliveries.

The postal service is kind of a constitutional requirement. I mean maybe not expressly, but part of the Fed's enumerated responsibilities is the maintenance of postal roads. If, there's no PO, then there should be no federal highway spending.

Just throwing shit on the wall to see if it sticks."

I wonder. Getting rid of the USPS AND the FHWA? God. Imagine the union hysteria with that!

The rest of us do not get a big juicy tax payer funded pension when we retire. It's long past time to over-haul the public pension system and bring it in-line with fairness; bring it in line with the private sector.

The greedy democrat pension system (where democrats mainly benefit) will kill more than just the post office.

The unpopular ex-governor of Colorado, Bill Ritter(D), who stealthily opened up the door for government employees to unionize, is getting in on that sweet tax payer funded gravy train. When he retires, he will be eligible for 150K/year tax payer funded pension.

I never understood Saturday mail delivery. The Canadian post office has not delivered mail during my lifetime.

The retirement perks are pretty nice, too. They igve postal workers the opportunity to retire and collect full benefits at an age when the workers still are vigorous enough to go out and start a new career.

It's not as attractive as the "rehired annuitant" opportunities available for State workers in Wisconsin, but it's pretty sweet.

allow it to go broke. sell off its assets to UPS and Fed Ex and whoever else wants to start a postal service. End the Postal Service's monopoly on first class mail. save billions of taxpayer dollars. use actual creative thinking for once, Washington!

The post office can't and won't be shut down. The legal notices, court summons, collection letters, etc. that our legal system depends on to show a "good faith effort" to contact people require a postal system. Unless we're willing to scrap the entire judicial system, we have to keep the post offices.

Obama will never go for this but the feds should let the Post Office go into bankruptcy reorganization; void all the labor contracts, pensions and OPEBs. Then cancel all weekend delivery and get rid of non-performing workers. It will emerge a significantly stronger public corporation.

The post office can't and won't be shut down. The legal notices, court summons, collection letters, etc. that our legal system depends on to show a "good faith effort" to contact people require a postal system. Unless we're willing to scrap the entire judicial system, we have to keep the post offices

FedEx and UPS are better suited to these tasks, and do a better job of record keeping.

I worked for the Post Office for a year in the seventies. It is a horrible place to work, but a few misconceptions need to be rectified here. Postal Workers have a union, but it has no teeth-- it is forbidden by law from striking. USPS workers have a retirement plan, but it is funded by compulsory payroll deductions-- taxpayers do not pay a cent.

That said, it will be sad to see the USPS go, but time marches on for Chrissake. Private industry does the job better and cheaper.

In the 1850s, when John Butterfield got the government contract to deliver the mail along the Ox-Bow route, he told his stagecoach drivers, "Remember, boys, nothing on God's earth must stop the US Mail".

If you said that today, the union slugs would go, well, Postal.

PS Ann's Wile E Coyote metaphor is right on the money.

In fact, you could say the current Administration, particularly its "jobs" strategy, has Acme Products Company written all over it.

It's odd that the idea of applying basic economic concepts to the workings of government seems strange, almost un-American. That the USPS is a failed enterprise isn't news; that there is no business case for it to continue isn't news either. In the non-governmental context, an entity like the USPS would have gone through the bankruptcy process years ago, and either shed its inefficiencies or simply sold off whatever assets had value and closed up shop.

The USPS survives on a 'public good' argument, comparing it to activities like police, fire, and defense -- essential for the public good but difficult or impossible for voluntary market mechanisms to deliver. For the USPS, that would center on its job of servicing those parts of the country that private entities would decline to serve. (Whether there are such parts of the country is not obvious, but that's the assumption behind the argument for the USPS.)

That version of the 'public good' defense of the USPS hasn't stood up well when it's been used in other segments of the economy -- the provision of telecom or electrification in rural areas, e.g. For decades state regulators subsidized the provision of those telecom and electrical services in rural communities by keeping rates below the cost of providing the services, and subsidising them by charging higher rates to users in more densely populated areas. That system worked OK in the telecom and electric utility markets until they became competitive, and in many ways deregulated. At that point, an ability to enforce a cross-subsidization scheme became much more difficult to pull off. Yet the phones still work, and the lights still go on, in rural America.

A key difference with the USPS is that, in the electrical and telecom markets, the government didn't run the operation; it just regulated it and then let the private operational entities figure out how to make the business work with enough efficiency to stay afloat. If the USPS is ever to get to the same place, the lifeline to the public fisc has to be cut off.

My tiny rural PO serves a population of 218. I figure the salaries and maintenance for that PO equals at least $250,000. Thus, the cost of the PO is $1,146 per resident.

A total waste of money. All the tiny rural POs in my area should be shut down.

I live in a rural area so I am torn on this issue.

There are TWO post offices located within 4 miles of each other and the rest are in town-like areas 25 and 50 miles away. There is no reason to keep the TWO post offices separate and they should be consolidated into one.

There is no delivery at all if you are within a few miles and you must GO to the post office to pick up your mail or packages. Rural delivery is generally to cluster boxes and people have to drive several miles down to the boxes. Delivery to the cluster but not to your actual home.

This inconvenience is just part of being in a rural area. It is a trade off from the conveniences of the city verus the beauty/safety/peace/freedom of living in the country.

Closing rural post office locations would create a huge hardship for the residents who want to send a letter, get mail or receive packages through the USPS. There has to be some PLACE to get mail and send mail.

However, they don't have to be manned stations. AND they don't have to be manned by Federal Unionized employees. Fed Ex or UPS could easily and more efficiently man the station or just swing by to pick up and deliver.

Not a big problem except for the pro union Democrats who just refuse to face reality.

Crack's right on this. The Post Office isn't supposed to be a for-profit business. It's supposed to provide a means for every citizen to send and receive correspondence. Those people whose postal routes aren't worth the cost make the point: the mail is a government service done by the government because it's more necessary than profitable.

That said, the post office does need a major overhaul. Rather than trying to compete with FedEx and UPS, it should maybe drop back to delivering only mail, books and other informational materials in a reasonable amount of time. This would not make it profitable, but it would cut the losses while assuring that a free people still have universal access to the world of ideas and a universal if highly imperfect means of communication, thus serving the purpose for which the post office was originally created.

Jacob Asplund, Interesting point. Legal notices have helped keep newspapers alive. Regarding service, if the post office does fold you could still use the private carriers. I had an attorney client who would only send me letters via UPS. What would also occur would be a growth industry for private process servers and a overburdening of Sheriff's departments serving process.

For cash flow purposes in our business, the USPS is the preferred deliverer of invoices we send and checks that we receive from clients.

With every invoice we also send out a self addressed stamped return envelope. Cost to us about 60 cents including postage. As a result our clients send us our payments within days at no extra charge to them. This keeps our cash flow humming.

If we went to a more expensive system or more cumbersome system, such as UPS or Fed Ex our cash flow would slow to a trickle. I imagine the impact would be the same for many other small businesses.

Most of our clients either do not use the internet for bill paying or prefer to have THEIR own corporate business offices or CPAs pay their bills for them.

The additional costs and delays to either us, as a small business, or to the clients of using UPS or Fed Ex to deliver a check would be a drag on business and on personal finances.

Obviously, anybody with any brains could figure out last May they were in massive financial trouble and that 80% of their costs are labor. Agreeing to the contract was at best blatant misfeasance, and at worst deliberate malfeasance. Fire the managers for this misconduct. No retirement, no severance, out-the-door-and-stay-out fire them.

Then, after the managers have been replaced, then work out what we should do. A bankruptcy-like procedure that includes voiding the no-layoffs contract will probably be necessary.

When people sent Christmas Cards the post office hired extra carriers. (It was before the electronics could shuffle so much mail.)

It was like Santa Claus jobs.

And, the retailers who added sales help.

Back in those days, you could send your card around for a nickel stamp.

Today, Hallmark had to find other ways to do "greetings." And, to adjust to the computer ... they, too, had to adjust.

Post office just kept raising the costs of stamps. While there really is less mail. (If it wasn't for Amazon packages; and my bills, exactly what would the post office be delivering? And, they lost all those "direct deposit" checks that used to come in the mail.

Meanwhile, Rahm Emanuel is THREATENING teachers ... as if they don't have to special credentials. And, as if the government can oversee anything ... without it just being a barrel of pork.

Anyway, Rahm's statement about "not letting a crisis go to waste," must have taken on a new meaning. Because I thought it meant you hid stuff ... as people were paying attention to "crisis." And, you dumped stuff you hoped the public wouldn't see.

But, yes. There's a game afoot. And, the GOP is no more united on what they want to see actually passed ... as the democraps.

While the post office took its biggest hit from United Parcel Service.

The post office won't go ... by the way ... because the government wants to keep their eyes out on Customs. And, where you have to pay "extra" ... for stuff that travels.

One solution is to have you go to the post office when you want to pick up your mail. Competition isn't going to pick this dog up. The costs to deliver mail ... piece by piece ... is still too high to the government.

Sears built its business by using telephone ladies in Chicago, taking orders. Printing their catelogs which became reading material in out-houses.

And, sending out merchandise all over the country, through the US Mails. They also took returns, easily. And, for this they built "hubs," I think ... Sears stores. Where you could when you had to send it back.

All countries have post offices.

If ours don't make it ... it will be another slap at stuff we fail at. While if you were in England (let's say), you'd see boxes where you could drop letters.

And, every country sells stamps.

But the real problem, now, is do you want to spend 50-cents ... to send a letter. And, then also weigh it, first, so it doesn't take a dollar to send a fancy card?

Florists still deliver flowers.

Pizza can still be delivered to your home. (And, remains a profitable business for chains as well as locals.)

The USPS has traditionally been a haven for patronage. Many of the employees manning its service counters seem to have received their training from the Depart of Motor Vehicles. This is a crappy business model even for a non profit business.

And what's the deal with Restoration Hardware? I had never heard about them until I got one of their catalogs in the mail last week. The thing must have weighed a pound, and barely got in the mailbox. It fit in the recycle bin though.

Privatize it, the way many European countries have done. That would allow the USPS to expand their product offerings (say, selling greeting cards and other related items, cell phones, etc...) and adjust prices to realistic levels. No real sense that it costs the same to mail a first-class letter from Madison to Milwaukee as it does from Key West to Seattle.

Closing the post office would be a hardship for my business. We have to send out bills to patients and the USPS is the best way to do that. In many cases, we can't charge them at the time of service because we have no way of knowing what their responsibility will be until after we submit to the insurance and the insurance company processes it. Also, a suprising number of my patients have no access to the internet at home. They go to the library if they want to use the computer. I don't think they can pay their bills from there securely. AND if I arrange for online payment, it introduces a whole new headache of credit card security to worry about.

If you didn't know that, how can you intelligently argue that the Post Office "can't be justified on a cost basis"? It costs you nothing, dude. (The guy who does $400,000 a year worth of mailing is actually subsidizing -your- occasional use.) It may only begin to cost you -if- Congress steps in with a bailout.

ADDED: My postman just delivered a 615-page catalog from Restoration Hardware. Why was that a feasible business to move for Restoration Hardware? I've never mail-ordered anything from them. Why is the government subsidizing this inefficiency? If I were interested in buying something from RH, I would go to their website. Instead, I have to lug this heavy object to the garbage can/recycle bin? Think of the carbon footprint. I do! But I don't believe the government believes the climate change hype. Because they never act like they do.

As a 20-year postal worker (and a poltiical conservative by nature) let me clear up a few misconceptions:

First, the USPS is not funded by taxpayer dollars. It gets income only from postage and the services it sells. They don't get to set their own rates; those are done by the Postal Rate Commission. They have to provide universal service to every address in the country, from the biggest city to the most remote place in Alaska, the bottom of the Grand Canyon, etc.

Second, most of my fellow postal workers that I know work hard to get the mail out to our customers. You may not believe that, but I know the truth. I'm usually busting my butt from the moment I get there until about a half hour before it's time to leave when I get my final dispatches out, and I'm not goofing around on the computer like a lot of people in the private sector, either, because I don't have access to one at work; we're not chatting, playing the football pool, etc, because we have work to do. Many of us work nights processing the mail. Some work weekends and holidays as well.

Third, we contribute to our own pensions, Social Security and to the federal Thrift Savings Plan (which is like a 401K), with the USPS matching up to 5%. When we retire, those of us in FERS get 1% per year of service of our high-3 average base pay. We can't rack up overtime to boost our pensions like some of those scamming public employees you've read about. If we work until age 62 (I think it is) we get 1.1% per year. So a 40-year postal employee might get 44% of his average salary from the past three years -- hardly a golden parachute!

The USPS just signed a new contract with the APWU (my union) in May, and now, with the ink barely even dry, they want to abrogate the no-layoff provisions that we've had for longer than I've been there. If things were so bad, why did they agree to a no-layoff clause again in May? It smells of bad-faith bargaining, of planning all along to go to Congress to abrogate the contract.

And to put it in perspective, we've lost hundreds of thousands of employees over the past few years, and now they plan to lose another 100,000 through "attrition" and try to lay off another 120,000. They want to cut from 520 processing facilities down to less than 200, close 37,000post offices, etc. And all of this in the worst economy since the Great Depression, with 3/4 of the country underwater on their mortgages. It's a damn nervous time to be a postal worker.

Hmmm, I googled the phrase "USPS indirect subsidies" and found numerous links detail how the federal government subsidizes the Post Office. Direct subsidies were ended in the 1980s but several indirect subsidies still remain.

Now you're in my territory! I worked for the PO for 30 years. So I have plenty of criticisms of it. But ...There is no govt subsidy of the PO, no propping up, at least so far, that was eliminated more than 40 years ago.Belonging to the postal unions is completely voluntary. No one has to belong. They are powerless to demand higher wages since they have no power to strike. No layoff only applies to full time, regular employees. When you go to work for the PO, you will be a PTF (part time flex) for 1-2 years at least. The number of ptfs is huge, and I have heard they are not getting full hours, far short of it. PTF's can be laid off any time, or so limited they quit.We do not have lavish health benefits! At the time I retired, I was contributing $90 every 2 wks to my health plan. Now that I'm retired, the cost has ballooned to $383 a month.There's a reason the PO labor cost is 80%. Each carrier drives to every block in every community and then they WALK to every house in America EVERY DAY. That takes a lot of people - hello? And the high cost of gas is ruining the PO, all those little trucks (not loaded with expensive pkgs like fedex but with cheap letters) going to every block in America.It's not the unions, UPS and fedex are unionized too - THEY have the right to strike.That said, the PO adapts at an agonizingly slow paces, and Sat. delivery should have been stopped at least a year ago.

All these calls to end the cushy PO union jobs is more "race to the bottom". Killing everything that makes America great. Race to the bottom. Where we all are lucky to get 1 bowl of rice and brown, smoggy air to breath. Thanks Rethugs.

Re subsidy vs. not: Pardon my ignorance but, if a business is consistently losing money, but not going bankrupt, then I see only three possibilities:

- It has saved funds it can rely on to use to pay its obligations.- It is borrowing money to pay its obligations (and thus an increasing debt burden).- It is receiving free money (i.e. "subsidies") in order to pay its obligations.

Which (combination?) of these is the USPS employing to remain as a going concern?

"I've never mail-ordered anything from them. Why is the government subsidizing this inefficiency?"

Ann, watch out. Don't mess with the mail. I shouldn't even be talking to you, but I'm telling you as a friend. Here's how it's going to happen: you may be walking. Maybe on a crisp, autumn day just like today. When a mail truck will slow beside you, and a door will open, and a mailman you know, maybe even trust, will offer to give you a lift. And no one will ever see you again!

The German PO makes a profit, sure, but they don't sell stamps for 44 cents!While I was a letter carrier, virtually every contract was determined by mandatory arbitration. So our raises were typically 1%.The PO needs a major overhaul, and - surprise - like other businesses, less govt regulation!Fedex and UPS should want no part of first class mail, it's a money pit.

The USPS, as currently structured, promotes a distorted view of their particular sector of the market. They need to reduce expenses and/or raise revenue. If either measure fails to satisfy the market, then they will fail on their own lack of merit.

In any case, it doesn't need to fail; but, it does need to be managed according to the constraints imposed by reality. Not unlike the government, which it closely mimics.

As for cost-of-living, and other reasons offered to justify extraordinary compensation (including benefits), they arise due to policies which have distorted the market at large (it's not just real estate).

How would you prepare for a public debate against a GOP nominee with the record the Obama is taking to the stage? The incumbent can blame Bush and Congress only so much before the shark is jumped. POTUS is one well-crafted metaphor about blaming other from outright route next November.

This election will be won or lost in the debates. Hillary proved that the incumbent cannot think very quickly on his feet and doesn't do well when flustered. The GOP nominee needs to be willing and able to go after him incessantly, accusations of "bully" and such should not be considered a problem.

Besides...one need run a baseless negative campaign against the incumbent. The administrations actions and own words have provided a Himalayanesque mountain range of ad and debate fodder.

If the Post Office goes tits up for a few months, it will only be one more sizable nail in the coffin. 80% labor costs when both UPS and Fed-Ex are under 50%?

The German post office is awful. As are all other postal systems in the foreign countries I've lived in. They're expensive, inconvenient and a nightmare to use. Why? Because they offer banking service, phone service and all kinds of other things, but haven't figured out they need extra staff to take care of the extra services. The usual scenario is one or two employees and 15 or so patrons in a clump, pushing and shoving toward the counter since there's no roped-off line for the next available clerk. USPS may have its faults, but I'll take it over any German post office any day!

I received a leave of absence notice from opposing counsel for a case in Fulton County, GA recently. The postage on the envelope was $6.22. When I opened the packet it was simply an announcement that he was going on vacation, requesting that nothing be scheduled while he was gone. The certificate of service had 81 parties on it (this guy has a significant caseload.) We are talking over $500 in postage alone (never mind paper, ink, staples and labor) just to say "I'll be out of the office for a while." That's insane.

E-filing and e-notice in the legal world are spreading somewhat slowly, but will take over in 3-4 years. Just the volume of correspondence associated with the courts disappearing from the USPS mailstream will put a serious hurt on them. Then consider that other industries are moving much faster.

The energy savings in unbundling and stripping down the USPS should be significant, so this can be looked at as a "green" concept. Time for subsidies to help move people off physical mail even faster.

As to the USPS with its ossified cost structure...Dosvedanya, it's been nice!

Not mentioned are franking privileges. How much of the USPO operating losses are due to franking privileges and reduce cost subsidies to other government agencies, federal,state and local? Shouldn't also be charged the same rates as private entities?

edutcher said..."If they don't want a Constitutionally-mandated responsibility, they can contract it out."

They don't have a "Constitutionally-mandated responsibility" to "establish Post Offices and post Roads"! Read the damn text! You don't even have to look it up, it's been practically spoonfed to you and you're STILL getting it wrong!

This kind of idiocy is why we get called the stupid party. At least when Democrats get the Constitution wrong, they have the excuse that they don't care what it says.

I like the USPS. It's fast, convenient and, quite frankly, a hell of a lot better than UPS, which is a loser of a company hell bent on destroying and not delivering packages. I cringe every time I order from New Egg and get my UPS tracking number.

USPS Saturday delivery has mystified me for years. Besides making no sense, it really gums up scheduling personnel.

Out here in the west, most new developments have centralized mail boxes. One plan would be to levy a tax for anyone not using a centralized mail box.

Yes, Joe, it has the power, should it so choose. It does not, however, have the obligation to do so—or do you suppose that the Congress is obligated "[t]o borrow Money on the credit of the United States," Art. I § 8 Cl. 2, "regulate the Value … of foreign Coin," Art. I § 8 Cl. 5, or "declare War," Art. I § 8 Cl. 9? The Constitution grants Congress certain powers. It doesn't require their exercise.

I hate radicals. Why not keep your damned hands off the USPS and go after any one of 1000s of more expensive, completely useless sources of Federal waste? The Department of Education? Homeland Security?

Most of the arguments against the postal service here boil down to "well I don't need it or use it so GET RID OF IT!"

edutcher said..."I seem to recall the Post Office is Constitutionally mandated. And, you, a law professor."

It isn't. And you, pulling the "and you a law professor" line!

#fail

Shove it up your Libertarian ass, moron. The responsibility to determine what is done about the mails still rests with Congress. They make the call, whether to contract out or not.

You're the #fail.

And the professor line was a joke, which, obviously, you're too dense to see.

"If they don't want a Constitutionally-mandated responsibility, they can contract it out."

They don't have a "Constitutionally-mandated responsibility" to "establish Post Offices and post Roads"! Read the damn text! You don't even have to look it up, it's been practically spoonfed to you and you're STILL getting it wrong!

This kind of idiocy is why we get called the stupid party. At least when Democrats get the Constitution wrong, they have the excuse that they don't care what it says.

I read the damned text, asshole. It says they have the power. Even if they want it done privately, they still make the determination.

So you're the one getting it wrong. Even in the old days, they doled out the contracts.

And keep your stupid party to yourself, jerk. You're the ones who keep giving us people like Ron Paul.

Joe said...

I like the USPS. It's fast, convenient and, quite frankly, a hell of a lot better than UPS, which is a loser of a company hell bent on destroying and not delivering packages. I cringe every time I order from New Egg and get my UPS tracking number.

UPS has been getting beaten up by the teamsters for years. They used to be pretty good, but, apparently, that's chnaged.

Palladian said..."I hate radicals. Why not keep your damned hands off the USPS and go after any one of 1000s of more expensive, completely useless sources of Federal waste?"

Mail delivery is a "traditional governmental function" (cf. National League of Cities v. Usery, 426 U.S. 833, 852 (1976)), and I'm deferential to tradition. Thus, I think the moderate path here is, as I've said above, to simply remove the postal monopoly statute and see what happens.

I seem to recall that one of the objectives of the Post Office is to promote reading by having low rates on books, newspapers and magazines. That's not all bad. Many people enjoy newspapers and magazines even if they are available online. A magazine delivered by Fed Ex would be pricey.

I'm not a libertarian, I'm a conservative. And what's especially bizarre is that nothing I've said here (in this thread or elsewhere) would imply that I'm a libertarian; you're simply concocting a straw man based on, well, who knows what.

"I read the damned text, asshole. It says they have the power. Even if they want it done privately, they still make the determination. "

Congress has the power to establish a postal service. It does not have an obligation. They can make a determination, but they don't have to. They can give a monopoly to the government's postal service, but they don't have to. They can expressly contract it out to private carriers, but they can also decline to exercise their authority at all and allow private carriers to do as they will. It is correct that they can make the determination; it is not correct that they must make the determination.

Let's not lose sight of your original claim: You claimed to "recall [that] the Post Office is Constitutionally mandated." It isn't, and when your error was pointed out to you, you doubled down and got nasty. Double #FAIL

"And keep your stupid party to yourself, jerk. You're the ones who keep giving us people like Ron Paul."

Again the straw man you've pulled together. I'm a conservative, not a libertarian, and I have no regard whatsoever for Ron Paul and his crazy fans—whom you resemble, incidentally, in your ignorant off-the-cuff invocation of the Constitution.

Regarding that catalog ... Restoration Hardware is a profit-motivated corporation, so presumably its management has decided that sending out huge catalogs on an unsolicited basis is actually a cost-effect measure. Considering that the response rate on most forms of direct marketing is under 1%. and that the costs associated with sending out such large catalogs are not insignificant, I would imagine that Restoration Hardware's merchandise markup is quite high!

Currently, I would agree. However, if the first class monopoly was lifted, their very bright marketing and business types would come up with a way to make it happen. Same with UPS.

The great thing about magazines is that they are distributed like clockwork, twelve months a year for the most part. That's a nice chunk of reliable monthly revenue. I'm sure delivering periodicals to extremely rural or even semi-rural (think Atlanta, lol), would be expensive, but between the hubs, and major metros, I bet they could easily compete.

I'm not as anti-Post Office as most conservatives and libertarians, but the USPS has been a slow-motion suicide since e-mail became mainstream. And the reforms that could save it are the ones that make liberals cry bloody murder at the first mention. (Why is it the only entities liberals ever think need reform are in the private sector?) No private corporation could function as the USPS does and survive. Turns out not even a public corporation can function that way and survive.

I'd be glad to have the Post Office survive if the whole archaic piece of shit system was reformed. But if they want to just carry on with business as usual, raising postage a couple cents every year while still bleeding money, then to hell with all of them!

Picking up on and extending something Palladian said, let's get rid of the Dept. of Homeland Security and the Pentagon and the Dept. of War and the C.I.A. and the NSA...and then let's see whether the Post Office really needs to go. It provides a much more beneficial service than these mentioned.

I seem to recall that one of the objectives of the Post Office is to promote reading by having low rates on books, newspapers and magazines.

Works at my house. We probably get at least a book a week by media mail.

Then again, some of that is through Amazon Prime, which Amazon gives out for free. That is a huge mystery to me. How is Amazon Prime doable? What agreements do they have with UPS to make that work? They hand out Prime like candy, and when you have it, they're happy to send you a $3.15 used book for free with two day delivery. I'm fascinated by it. It seems impossible. Like Netflix streaming.

Scott M said..."Currently, I would agree [that a magazine delivered by Fed Ex would be pricey]. [Nevertheless], if the first class monopoly was lifted, their very bright marketing and business types would come up with a way to make it happen. Same with UPS."

Not to mention, it would be a massive spur for other companies' very bright marketing and business types to figure out ways to break into the market and compete with FedEx and UPS. Those companies provide the natural "right out of the box" competition to USPS in a post-deregulation world, but others will follow once the market expands to its natural dimensions.

As much as I despise how the USPS operates, I think we should figure out a way to save it.

It is one of the core functions of the fed gov't. Its failure is, imo, a bigger national embarrassment than the credit downgrade.

I don't think it needs to be profitable; there are many tasks a gov't undertakes without concern about profitability (like defense), but needs to be efficient and earn the trust of the people. It's telling that so many don't even care if the postal service goes under--it's painfully obvious to anyone who has visited a PO that the "service" is a terrible joke. Fix it and people wouldn't care about losses.

I have been thinking about saving Snail Mail and I even blogged about it here.

But my research into this subject makes me soooo upset with Postal Worker Clyde who publishes obligatory union propaganda on this blog. The USPS has not paid its own way for years but the song and dance out there is that "if it were not for required prepaying retiree medical" the Post Office would be paying its own way.

Fact of the matter is that the union retiree health and defined benefit pensions are underfunded by about $70 Billion. Who will pay for that? Not the unions.

Pathetic postal management, union work rules, excessive wage rates, overgenerous time off, too many post offices, too many employees . . . the list goes on and on and on.

Suddenly a government worker is discovering that the bad economy is going to sink government union jobs -- possibly even his own. Well Clyde, welcome to the club. I am being forced to retire because my job is being eliminated and I have no retiree health (other than Medicare), or government financed pension (other than Social Security and an inadequate 401K).

We just cannot afford you folks any more. Buggy whips have long had a limited market with the Amish and the decline of paper mail is transpiring in front of your very eyes.

The Amish are a bad analogy. They do not drive the buggy whip market at all. Their lobby, not having blackberries our email, is pathetic when compared to the lobby and market share commanded by the gigantic dominatrixi.

Blue@9 said..."As much as I despise how the USPS operates, I think we should figure out a way to save it. It is one of the core functions of the fed gov't. Its failure is, imo, a bigger national embarrassment than the credit downgrade."

Why? Why is it a failure to concede that government can't provide a service as efficiently as the private sector? That should be no surprise to anyone. When parents raise children who are better at something than they are themselves, that is usually perceived as success, not failure.

I'm not against government competing in the market, especially when the market has arisen as a result of the demonopolization of a traditional governmental function. (It's readily understandable why, two centuries ago, the mails were considered a governmental function.) But I am against government distorting the market in order to give itself a competitive edge against private providers.

Let's not lose sight of your original claim: You claimed to "recall [that] the Post Office is Constitutionally mandated." It isn't, and when your error was pointed out to you, you doubled down and got nasty. Double #FAIL

Still wrong. even to do nothing is to make a determination and the people who wrote the Constitution clearly intended the Congress to decide who was going to maintain post roads and offices. Since it was formerly the province of His Majesty's Royal Mail, some decision would have to be made. That's the power granted to Congress.

I'm not a fan of the NLRB, "unfair labor practice" law, and government-certified collective bargaining agents in the private sector. A public-sector union is, to my way of thinking, even more ridiculous.

But in this case? Management signed a no-layoffs contract less than four months ago. If that contract can't stand and the USPS survive, the USPS management should be axed for signing it first, before we do anything else. FIRE THEM ALL.

edutcher said..."even to do nothing is to make a determination and the people who wrote the Constitution clearly intended the Congress to decide who was going to maintain post roads and offices."

I certainly agree that the framers anticipated that Congress would decide how the mails were handled. Nevertheless, that doesn't transform Constitutional authorization into constitutional demand (Congressional inaction =/= Congressional decision), and it does nothing to salvage your original (and incorrect) claim that "the Post Office is Constitutionally mandated."

"And Conservatives don't talk like you. Libertarians do."

Perforce, some of us do. The conservative movement is not delimited by the edges of your imagination. (I have no idea how libertarians speak, by the way, not being one myself.)

edutcher said..."Gee, they speak just like you - in circles and sophistry."

If you're proposing to exclude people from the conservative movement based on their sounding a hair too edumacated for your liking, you confirm my point that it's idiots like you that get us called the stupid party.

If you're proposing to exclude people from the conservative movement based on their sounding a hair too edumacated for your liking, you confirm my point that it's idiots like you that get us called the stupid party.

Circles and sophistry aren't necessarily marks of education (and I can actually spell the word). Any moron or troll, such as you, can be handed talking points.

And I've heard few, if any, Republicans refer to their party as the stupid party - only outsiders like you do it.

Your verbal effluvia is no different than the Libertarian last week who wanted to contend that the Constitution didn't expect reasonable laws from its lawmakers.

I recommend going to alternate-day delivery. Make every route twice as big as it is; deliver to half the route on Monday-Wednesday-Friday, and the other half on Tuesday-Thursday-Saturday. Increase "bulk" mail delivery costs, and fire 40% of the people. That should balance things out.

How strange that Congress, which does so much that shouldn't be done AT ALL, elected to privatize one of their 18 enumerated powers in the Constitution.

The post office is the only business I know where you have lines out the door, long waits due to a large customer base and yet they are always broke. Any other business with that sort of patronage wouldn’t be closing doors they would be opening additional shops on every corner. What this is is a failed business model. Controlled by government, run by unions and employees who cant be laid off or fired…sound familiar? ? ? ?

Over the past ten years, I've noticed something very interesting. I sometimes don't bother to go out to our post box—skipping a day is no big deal because all the information I need is available on-line. Junk mail? Let it sit there before it moves directly to the recycling bin.

"Do nothing" is a perfect approach. But I mean really do nothing. No bailouts, no legislation that pays-in to the USPS' bloated pension plan-- nothing!

Let the USPS management and unions figure out how to make their business profitable. If they can't, the business goes under. Its important functions will continue through new entrepreneurial ventures that jump in to fill the void.

Don't give Netflix another reason to raise prices - please. My local USPS service is pretty good and the postage machines are available 24 hours a day, which makes it nice for mailing packages. I know there are areas where you couldn't leave an unattended machine, but, speaking selfishly, it works for me.

OMG, 138 comments. Do I have to read them all? My only comments are that as soon as Fedex and UPS can offer letter delivery for .48 (i'm cribbing this comment from somewhere), then we talk. Also, I didn't know that RH pays nothing. Is that really true?

edutcher said..."Circles and sophistry aren't necessarily marks of education (and I can actually spell the word). Any moron or troll, such as you, can be handed talking points."

Right, I was handed my talking points above. I'm sure whomever did so has talking points on standby for every nonsensical position someone can take in a fairly recondite issue. *eyeroll*

By the way, telling you to read what the text actually says is neither circular nor sophistry. You'd look less of a fool if you used words in a manner suggesting familiarity with and concern for their meaning.

"And I've heard few, if any, Republicans refer to their party as the stupid party - only outsiders like you do it."

I didn't refer to the GOP as the stupid party, you dolt, and I'm not an outsider. You, on the other hand, did refer to the GOP as such when you told me to "keep [my] stupid party"—my party being the GOP, as anyone who's been here for more than a few months knows—"to [my]self, jerk" (ante, 2:27 PM). How's that petard treating you?

It's my vague recollection that (at least at one point) the USPS did make money for the country because so much more mail left the USA outbound than came inbound, and by some agreement, once a letter leaves the USA bound for, say, Denmark, even though the Danes get no $$ to deliver it, they do because we deliver all the mail coming in from Denmark for free.

I saw something the other day about a post office supervisor discussing how inconveniencing the customers by making them wait was a way to optimize employee time. That way, employees weren't standing around waiting for customers, as they sometimes are at discount stores. My gripe is when there is a line out the door, one clerk is waiting on customers, and another clerk is counting her cash, balancing her drawer, oblivious to customers.

Clyde, thank you for working so hard, but too many of your colleagues look like they are willing to let you carry the load. "Industrious" is not an adjective which comes to my mind when thinking of postal employees. Of course, the post office has been a hot bed of affirmative action hiring, so you racist who want to shut it down need to think about that.

The story I heard was that the post office got all this modern equipment, so they give bulk mailers a deal to justify all that equipment and all those employees. All you postal union employees who say the union is toothless, that's not the impression I get from this side of the counter. Just recently on a news talk show they discussed eliminating Saturday delivery, and they said "Oh No!that would eliminate 20,000 jobs!" Hello, just as schools are not make work places for teachers, the post office is not a make work establishment for postal employees.

A few years ago my son was sharing a house with a couple of other guys. They had a discussion about who got the most mail. What they told him was that while he didn't get a lot of mail, he did get hand written letters. While none of them were about to try to write or send a handwritten letter, they appreciated the significance of same. Another lost art.

Aside from delivering letters and packages, let's not forget the really essential function provided by the USPS - the "post office correct" address of every physical end point in the US.

Not arguing that alone is a justification for saving the joint and that function could be moved elsewhere, but it is something.

Of course, that just reminds me of the early days of email when USPS proposed to have some sort of control over email addresses so as to monetize the replacement for paper letters.

I believe we need a Post Office in some form, but I'm more worried right now that the exploration of what that from might be is about to be undercut by the 2011 version of TARP and the take-over the automakers. Big bail-out without any fundamental reform.

Crack Emcee nailed it. End the unions, end the problem. Period. These parasites have been leaching off the country for decades. It's long past time for America to kick them to the gutter where they belong.

Privatize it, the way many European countries have done. That would allow the USPS to expand their product offerings (say, selling greeting cards and other related items, cell phones, etc...) and adjust prices to realistic levels. No real sense that it costs the same to mail a first-class letter from Madison to Milwaukee as it does from Key West to Seattle.

'Subsidizing first class mail for one ounce envelopes might be okay but bulk rate and commercial mail should not be subsidized by tax payers'

It isn't.

'The rest of us do not get a big juicy tax payer funded pension when we retire. It's long past time to over-haul the public pension system and bring it in-line with fairness; bring it in line with the private sector.'

The Postal Service is a net _contrinbutor_ to the Treasury...in a scammy way set up by Congress.

What tends to get left out of all these discussions is that the Postal Service would be actually be pretty close to breaking even, maybe even slightly in the black, if it wasn't required to overfund its retirement accounts in a way other government agencies are not.

(The Postal Service is intended to be a self-sustaining service, operating on revenues from postage and fees. If it wasn't for some peculiar things Congress has done, it would be very close to doing just that.)

In practice, of course, that money in the 'retirement fund' has been taken by Congress to hide the real size of the deficit, just like the 'funds' in the Social Security fund or the other 'funds'.

In short, Congress isn't proping up the PO, it's draining it as a source of revenue. One of the things that could put the Postal Service back on its feet would be to end that practice...but then the actual size of the Federal deficit would be much clearer.

'FedEx and UPS are better suited to these tasks, and do a better job of record keeping.'

No, they aren't (to the first), to the second I have no idea.

FedEx and UPS are profit-driven. Nothing wrong with that, but it rules out universal service, which is one of the reasons the PO exists in the first place. It simply does not pay to deliver to remote rural areas.

Did you know that it's a common practice now for FedEx and UPS to hand over a large chunk of their rural package traffic to the Postal Service for delivery? That package you mailed via UPS or FedEx, if it went somewhere outside a major city, may very well have been delivered by a rural postal carrier, because that's _cheaper_ for UPS and FedEx than doing it themselves.

'That said, the post office does need a major overhaul. Rather than trying to compete with FedEx and UPS, it should maybe drop back to delivering only mail, books and other informational materials in a reasonable amount of time. This would not make it profitable, but it would cut the losses while assuring that a free people still have universal access to the world of ideas and a universal if highly imperfect means of communication, thus serving the purpose for which the post office was originally created.'

The first class mail is subsidized by the rest of the mail, and the PO is not competing with FedEx and UPS for business. FexEx and UPS are giving the Postal Service large chunks of their business in the not-profitable areas.

There are good reasons for not treating some things in terms of business economics. There are many public goods that cannot be justified in terms of business profitability and economics, but are still public goods. Universal service may nor may not be a goal one supports, but if it is, it can't be achieved throught he private sector alone, because it's unprofitable, esp. in an age of four dollar a gallon gasoline.

Remember too that just because the voters are mad at the Dems and the unions right now, doesn't mean they've turned against the New Deal en masse. They haven't, and conservatives will be comitting electoral suicide if they forget that.

Much of the voting strength of the GOP comes precisely from the regions are are served by such public and semi-public organizations as the Post Service, REA, etc.

'Maybe that was the case in the 70's but the fed lawyer wife, and the Postal Union says that workers belong to either CSRS or FERS and both have major employer contributions'

Which has no relevance to taxation, since the UPS is _not tax-funded_. Eliminate the money Congress indirectly drains from UPS and the Treasury needs more money from taxes, or deeper spending cuts, not less.

I bought $700 worth of household goods and gifts from Restoration Hardware last year, after receiving their big catalog. It really hurts me to read here that they apparently send them out willy-nilly. There goes the old self esteem.

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I read your creation & feel that this is a awesome article.Actually the era always comes.

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